In a medium bowl, combine the yeast with ¼ cup lukewarm water and 1 tablespoon of granted sugar. Mix to dissolve the yeast then set aside for 5 minutes.
When the yeast gets frothy, about 5-10 minutes, stir in the milk, vanilla, eggs, and melted butter and set aside.
To the bowl of a stand mixer fixed with a dough hook, add the flour with ⅓ cup sugar, salt, and nutmeg. Turn on the mixer on the lowest setting just to combine. Pour the yeast and milk mixture into the dry ingredients.
Mix on the lowest setting for one minute, then an additional two minutes on the next level until a soft, smooth dough forms. Pour ½ tablespoon of vegetable oil on a sheet pan or silicone baking mat.
Smear it around in a 10 x 8 inch rectangle. Remove the dough from the mixer bowl. It will be wet and sticky, so oil your fingers well before handling the dough to prevent sticking.
Gently stretch the dough into a rectangle then fold it back over itself in thirds. Form a ball and cover the dough loosely with plastic wrap over an upside-down bowl.
Let the dough rest for 10 minutes them repeat the process of stretching and folding the dough on itself.
Form the dough in a ball and place in a lightly oiled bowl. Cover with plastic wrap and refrigerate overnight.
In the morning remove the bowl of dough, set aside to rise in a warm place until double in size, about 1-2 hours.
With oiled fingers, pinch off pieces about the size golf balls. Place the dough balls on greased baking sheets. Cover loosely with plastic wrap that has been lightly sprayed with cooking spray (Pam).
Set aside to rise in a warm place for about 15 minutes.
In a heavy bottomed, high-sided pot, heat about 3 inches of oil over medium-high until the oil reaches 325 degrees F. Do not heat the oil any higher or the outsides of the dough balls will burn before the centers are cooked.
Working in small batches, fry the malasadas until they are uniformly golden brown, 5 to 7 minutes per batch.
Drain the malasadas on paper towels just until they are cool enough to handle then roll them in sugar and serve warm.
You can also use cinnamon sugar, glaze, or fillings of your choice. To fill the malasadas, place the filling in a plastic pastry bag with a medium round tip.
Gently push the tip into the side of the dough and push in a small amount of filling.